DSE probes unusual price surge in Islami Bank shares
The BSEC asked the DSE to submit the investigative report within the next 30 days
The Bangladesh Securities and Exchange Commission (BSEC) has asked the Dhaka Stock Exchange (DSE) to investigate the unusual price hike in Islami Bank shares.
In an order issued on Wednesday (25 September), the commission noted that the price and volume of Islami Bank shares have fluctuated significantly in recent times, which appears unusual and suspicious.
The country's premier bourse will investigate the trading of Islami Bank shares from 6 August to 25 September to identify the reasons behind such unusual price and volume movements, including potential market manipulation, insider trading, and other market abuses, according to the BSEC order.
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The securities market regulator has asked the DSE to submit the investigation report within the next 30 days.
Islami Bank shares surged over 116% to Tk70.40 during the specified period. On 6 August, the share price was Tk32.60, and it rose to Tk70.40 on Wednesday.
In the last 11 working days, the share price increased by 80% from Tk39.20 amid high volatility in the capital market.
On Wednesday, the country's leading Shariah-based lender reached a historic milestone, with its market capitalization surpassing Tk11,334 crore for the first time since its listing on the DSE.
Market insiders attribute this growth to a recent rally following the downfall of the Sheikh Hasina-led government.
Islami Bank is now the most valuable stock in the banking sector, surpassing BRAC Bank and Dutch-Bangla Bank.
Market analysts attribute this remarkable surge to three key factors – the bank's getting freed from the grips of S Alam Group, an expected investment from the International Finance Corporation (IFC), and efforts by existing shareholders to increase their stakes in the bank.
An analyst from a brokerage firm noted that Bangladesh Bank Governor Ahsan H Mansur recently mentioned in a press briefing that discussions are underway with the IFC to acquire a 10-15% stake in Islami Bank, which could help revitalise the bank. If successful, this move could restore investor confidence.
He added that there is considerable hype surrounding Islami Bank shares, with investors believing the bank's situation will improve following its separation from the S Alam Group.
However, he pointed out that the bank's financial status has not been officially disclosed, and the upcoming publication of the third-quarter financial report will provide clearer insights into the bank's condition.
